Legal fees in Memphis schools fight close to $2 million

Whenever he enters the courtroom to preside over arguments about the constitutionality of laws enabling municipal school districts in Shelby County, U.S. District Judge Samuel "Hardy" Mays usually sees 20 attorneys around and behind the plaintiff and defendant tables.

A few more attorneys are typically relegated to the courtroom audience. When arguments resume Thursday, the majority of those two dozen or so attorneys will spend most of their time just observing.

But they — and their law firms — will get paid.

Going back to the start of legal actions in 2011 over merging Memphis City Schools and Shelby County Schools, the legal fees and expenses billed to taxpayers are about $2 million.

Legal bills connected just to the third-party complaint filed by the Shelby County Commission in late June have already exceeded $750,000 and are likely nearer to $1 million by now, based on an analysis of bills filed by the firms representing the Shelby County Commission, the Memphis City Council and the six suburban municipalities. The Commission and Council are plaintiffs in the complaint, aligned against the suburbs and the state of Tennessee, who are aligned as defendants.

The Memphis firm Baker Donelson has been representing the County Commission since litigation started in early 2011 with a lawsuit against the Commission by the then suburban-only Shelby County Schools district. From April 26 to Aug. 31 of this year, fees and expenses charged by Baker Donelson totaled $221,428.33, most of those related to the legal issues involved in the municipal school district complaint. Since the 2011 start of litigation, the Commission has incurred $696,191.84 in charges.

The suburbs this summer rushed to retain Memphis firm Burch Porter & Johnson to represent their interests. Rather than allow the state to take on the entire burden of challenging the Commission's charges, the suburbs asked the judge to allow them into the fight.

Neither the Burch, Porter & Johnson nor the Baker Donelson bills include fees racked up on Sept. 4 and 5 in nearly 15 hours of trial.

The Wade Firm, headed by Allan Wade, represents the Memphis City Council and has charged $96,277.63 with $38,252.20 so far charged for the third-party complaint currently in court. The City of Memphis legal expenses, some of which have gone to Wade, have been $12,451.28 for the third-party complaint litigation and $16,569.77 overall.

Various state officials and agencies, the only defendants in the Commission's third-party complaint before the suburbs were allowed to join, are being represented by the state's Attorney General's office rather than outside counsel.

The billable rate for attorneys runs the gamut, from $110 an hour for junior attorneys to $375 for Tom Cates of Burch Porter & Johnson to $510 for Leo Bearman at Baker Donelson.

Most elected officials involved say they wish so many taxpayer dollars were not being funneled to lawyers.

Arlington Mayor Mike Wissman, in a break during the first two days of trial, said it frustrated him to know the lawyers were being paid to, as he put it, fight the wishes of taxpayers funding them.

That sentiment has been widespread in the suburbs, and was raised again last week when Bartlett approved adding another $250,000 to its original commitment of $100,000.

"What I hate to think about is the people who are supposed to be representing us in the county — all of the municipal areas — they are using our own money to make us spend this money," said Bartlett Alderman W.C. "Bubba" Pleasant.

County Commissioner Steve Mulroy, a constitutional law professor at the University of Memphis, characterizes that argument as hypocritical. He says the suburbs "were not complaining about that back when this whole legal mess first started" when SCS tried to block merger with MCS by filing suit against the Commission, the Council, MCS and the City of Memphis.

"The reason we are in federal court in the first place is because the suburban school system that the County Commission funds ... used its county tax dollars to go into federal court and file a lawsuit against us and we were having to fund both sets of lawyers," Mulroy said.

The suburban school system eventually ran up legal fees to a firm based in Nashville and Knoxville, Lewis King, that totaled $557,822.50 through last September. A ruling by Mays in August 2011 and subsequent settlement agreement was a split decision, with SCS failing to block the merger but the Commission unable to convince the judge to strike down 2011 laws aimed at guiding the merger process.

The now unified county school board has used in-house counsel for issues since last year.

Five of the seven suburban SCS board members — Wissman among them — also hired an outside firm to enter them into the 2011 litigation as individuals, and have a standing request that the judge make county taxpayers reimburse them for $129,136 in individual legal fees.

City Councilman Shea Flinn said that while "people are always frustrated with legal fees and understandably so," he believes it is "tough to put a price tag" on fighting for what he calls essential constitutional rights and protections.

The suburbs claim the Commission and Council are wrong to stand in the way of establishing municipal school districts, that the 2011 and 2012 laws enabling them do not represent illegal state government interference into local education issues. Furthermore, in situations where a much-larger special school district like MCS transfers to a smaller system, it is rational to allow municipal or special districts to form in order to provide local control over education.

But the Council and Commission claim the laws could not and would not possibly affect any other county, and that the local control argument fails because the legislature voted against lifting the statewide ban on all municipal districts.

Allowing the legislature to carefully design laws to apply to just one situation while exempting all other counties and municipalities, say the Commission and Council, would establish a dangerous precedent.

"These are shots across the bow — private local acts masquerading as general (statewide) law and this won't be the only instance," Flinn said. "And who is this legislature shooting at? It's shooting at Memphis."

Martial language was also on display at the Bartlett meeting Wednesday, with alderman David Parsons saying: "I hate to see anybody spend that kind of money to fight their cousin but, at the end of the day, once you're picked on and you chose to fight, you need to finish it."

County Commission Chairman Mike Ritz, a Germantown resident representing a majority Memphis district, said nobody should expect a quick knockout, however. An appeal is likely no matter what Mays rules, and then there is the matter of another trial, scheduled for Nov. 6, over whether allowing suburban municipal school districts triggers violations of federal civil-rights protections by making schools in the county more segregated than they would be in a unified system.

"I suspect (the fees) will be twice as much by the end of the year — if not more," Ritz said. "This is not an inexpensive matter. Obviously, they feel very strongly about it or they wouldn't be spending their money on it. And that's where we are."